Course Project

Topics: Financial ratios, Financial ratio, Generally Accepted Accounting Principles Pages: 3 (829 words) Published: March 13, 2012
Oracle is one of the leading companies in the software and hardware industry. Oracle develops, manufactures and distributes various kinds of software and hardware systems worldwide. The company was founded in 1977 and is headquartered in Redwood City, California. Oracle currently has about 108,000 full-time employees worldwide.

Microsoft Corporation develops, manufactures and distributes a range of software products and services for various computing devices worldwide. Microsoft also manufactures gaming systems such as Xbox 360 and related entertainments systems. Microsoft was founded in 1975 and is headquartered in Redmond, Washington. Microsoft currently employs about 90,000 full-time employees worldwide.

Liquidity: Tootsie Roll has the advantage for each of the liquidity ratios. Tootsie Roll has a large advantage in liquidity as evidenced by the $3.45 in current assets they have for every in $1 in current liabilities while Hershey has only 88 cents in current assets for every dollar in current liabilities. Tootsie Roll also has a better current cash debt coverage ratio. Tootsie Roll has a slight edge in inventory turnover and a considerable advantage in receivables turnover.

Liquidity: In terms of liquidity Microsoft has the advantage of Oracle. Microsoft has advantage as evidenced by the Current Ratio where it has $1.69 in current assets for every $1 in current liabilities while Oracle has $1.37 in current assets for every dollar in current liabilities. Microsoft also has a better Current Cash Debt Coverage Ratio. Oracle does have better Receivable Turnover Ratio and Average Collection Period. However, Microsoft still has the advantage as shown above.

Solvency: Tootsie Roll has the advantage for each of the solvency ratios with the exception of free cash flow. Tootsie Roll can cover their interest expense 145 times with income before interest and taxes while Hershey can only cover their interest expense 4 times with their income before...
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